Trade, the Dollar, and the Decline of America

Abstract

The US economy is more open, in economic terms, than at any time in this century. And, for the first time in this century, the US is experiencing economic insecurity as a result of external factors. The increased feeling of economic insecurity at home is matched abroad by recognition of the decline of America: Paul Kennedy’s The Rise and Fall of the Great Powers was seized upon in Japan and Europe as a timely description of the end of America’s world leadership. Calls on Japan to play a major role in world affairs are the natural counterpart of the perception of America’s decline.